RIBA Procurement Survey 2012 - Emap.com · The RIBA commissioned Mirza & Nacey Research to conduct an on-line survey amongst architectural practices during the period January to February

SURVEY UNDER EMBARGO UNTIL: 00:01 THURSDAY 24 MAY 2012

RIBAProcurementSurvey2012

Mirza & Nacey Research May 2012

UNDER EMBARGO UNTIL: 00:01 THURSDAY 24 MAY 2012

1 Mirza & Nacey Research 03 May 2012

RIBAPublicProcurementSurvey2012FinalReport

Contents

Summary 2

1. Survey methodology and response 5

2. Respondent profile 7

3. How much public sector work is undertaken by architects 8

4. How often architects review the OJEU 11

5. Submitting OJEU bids 13

6. Outcome of submitting OJEU bids 17

7. Costs of preparing OJEU bids 21

8. Framework agreements 26

9. Architects’ perceptions of what is important in winning the bid 28

Appendix I - Survey questionnaire 29

Appendix II - Methodological notes 31

Appendix III - Profile of data sub-set 34

Research undertaken for RIBA by:

Mirza & Nacey Research Ltd

www.mirza-nacey.com

Reporting date: 03 May 2012



Summary

The RIBA commissioned Mirza & Nacey Research to conduct an on-line survey amongst architectural practices during the period January to February 2012. The respondent base is 362 architectural practices. Most of these respondents came via a direct email mailing, representing a 20 per cent response rate.

The aim of the survey is to establish the: importance of OJEU-related work and number of bids submitted success rate of OJEU-related bids cost of making bids total spend by architectural practices on making bids

This document sets out the results of the survey. The key findings of the survey are that:

42 per cent of all responding practices submitted at least one OJEU bid in 2011. This ranges from nine per cent of sole practitioners to 88 per cent of larger practices (over 30 staff) submitting at least one bid;

17 per cent of practices submitted between one and three OJEU bids in 2011, while nine per cent submitted more than 12 bids;

the success rate of individual bid stages is 27 per cent (excluding where the outcome is not yet know);

in two stage processes the bid success rate is reduced to 7 per cent. This success rate reduces further still when practices on framework agreements are required to enter third stage mini-competitions;

the estimated overall success rate for architects bidding for OJEU work is 15%;

42 per cent of bids were restricted pre-qualification questionnaires (PQQ), preparation for each PQQ bid costs practices an average of £2,500;

the average cost to architectural practices of preparing an OJEU bid ranges from £1,000 for negotiated bids to £5,000 for design contests. Note that for multi-stage bids costs are cumulative;

on average practices spent a total of £33,410 on the preparation of OJEU bids in 2011, ranging from £2,242 for sole practitioners to £109,146 for practices over 30 architectural staff;

OJEU-related work accounts for an estimated £138 million of architects’ fee earnings;

OJEU-related work accounts for about half of architects’ fee earnings from all public sector work, and eleven per cent of their total fees; and

in 2011 architects spent an estimated £40 million preparing OJEU bids. This is equivalent to 29 per cent of their OJEU derived turnover.



ImportanceofOJEUwork

OJEU-related work accounts for an estimated £138 million of architects’ fee earnings. This is 11 per cent of total fee earnings received by architectural practices in the UK and about half of the fee earnings received from all public sector work.

Table S1: Estimated fee earnings of architectural practices, 2011

ESTIMATED fee earnings of architectural practices, 2011, £millions

fee earnings from public sector work

TOTAL fee earnings

from all work OJEU-related work work not related to

OJEU 1 139 3 13

2 85 1 8

3 to 5 206 1 26

6 to 10 305 27 49

11 to 30 480 81 49

31 or more 342 25 5

ALL 1,557 138 150

LevelofOJEUactivity

24 per cent of architectural practices review the OJEU at least once a fortnight, including 89 per cent of large architectural practices (over 30 staff). 46 per cent of responding architectural practices never review the OJEU.

Table S2: How often architectural practices review the OJEU

how often review OJEU per cent

at least once every two weeks 24

between once a month and once every three months

15

once every six months or less 16

never 46

TOTAL 100

42 per cent of all responding architectural practices submitted at least one OJEU bid in 2011. This ranges from 9 per cent of 1 person practices to 88 per cent of larger practices (over 30 staff). 17 per cent of responding architectural practices submitted between 1 and 3 bids in 2011, 9 per cent submitted more than 12.

Table S3: Proportion of architectural practices submitting OJEU bids in 2011

size of practice (number of arch. staff)

per cent practices submitting bids, 2011

1 9

2 24

3 to 5 44

6 to 10 66

11 to 30 70



31 or more 88

ALL 42

OJEUbidssubmittedbyarchitecturalpractices‐2011

UK architectural practices submitted an estimated 14,500 bids in 2011 (grossed-up figure).

Approaching half of bids (42 per cent) were restricted pre-qualification questionnaire (PQQ) (stage 1), other significant bid types were open bids and competitive pre-qualification (stage 1).

The success rate of these individual bids is 27 per cent, excluding where the outcome is not yet known. But taking into account the two-stage bids, where a practice must win both stages in order to proceed to fee-earning work, brings this success rate down to an estimated 15 per cent.

Table S4: Estimated number of OJEU bids submitted by architectural practices in 2011

ESTIMATED total number of bids submitted in 2011

by ALL UK architectural practices

success rate(%)

open bids 2,282 19

restricted - PQQ / interest stage 5,480 23

restricted - awards stage 1,064 31

mini competition 1,613 27

competitive - pre qualification 2,233 25

competitive - dialogue 390 35

design contest 847 n/a

negotiated 626 75

TOTAL - all bids submitted 14,535 27

TOTAL - overall success rate at final stage

15

CosttoarchitecturalprofessionofpreparingOJEUbids

The average cost to architectural practices of preparing OJEU bids ranges from £1,000 for negotiated bids to £5,000 for design contests. The average cost of submitting the first stage of restricted bids, the most common type of bid, is £2,500.

Table S5: Average cost incurred per bid

median cost, £s

open bids 2,500

restricted - PQQ / interest stage

2,500



restricted - awards stage 3,000

mini competition 3,750

competitive - pre qualification 3,000

competitive - dialogue 4,500

design contest 5,000

negotiated 1,000

Looking at how much architectural practices spent in total in 2011, preparing all their OJEU bids for the year, reveals an average practice spend of £33,410 - with a wide range by practice size.

Table S6: Average cost incurred per practice, for submitting all OJEU bids in 2011

size of practice (number of architectural staff)

mean cost of preparing bids, £s

1 2,242

2 2,422

3 to 5 11,570

6 to 10 15,058

11 to 30 65,707

31 or more 109,146

ALL 33,410

Grossing these figures up to reflect the whole profession, in 2011 architects spent an estimated £40 million preparing OJEU bids. This is equivalent to 29 per cent of the profession’s turnover which is derived from OJEU work.



1.SurveyMethodologyandResponse

About 1750 architects were emailed a link to a survey questionnaire in January 2012. Two reminders were sent. The questionnaire was also advertised in an RIBA Newsletter. A total of 362 responses were received by the time of the survey’s close at end February 2012.

Most responses came from the direct email. Only 7 per cent of respondents replied via the Newsletter link.

Table 1: Survey response

number

number of RIBA members contacted directly 1772

bounce backs 59

effective sample 1713

number participating 335

per cent response rate 20

number participating from link in RIBA newsletter 27

TOTAL RESPONSE 362

of whom number retired or inadequate response 29

EFFECTIVE RESPONSE 333

Statistical accuracy of results: +/- 5% at the 95% confidence limit. Where results are analysed by size of architectural practice, we have grouped practices into six size groups. Confidence levels are obviously lower than for ’all practices’, results presented for the largest practice size group (31+) needs to be considered with particular caution. Where results are analysed by region, we have grouped into four regions. Responses from Scotland, Wales and Northern Ireland are too low to report these parts of the UK separately.

DEFINITIONS

OJEU - The Official Journal of the European Union is the official publication of record for the European Union (EU). All contracts for architectural design work in the public sector valued at over £101,323 (since January 2010) must be advertised in the Official Journal of the European Union (OJEU). Open bids - All architectural practices responding to a notice in the Official Journal of the European Union (OJEU) will be invited to submit a tender. This is a one stage process.



Restricted bids - PQQ stage/Expressions of Interest - A two-stage bidding process: first, architectural practices responding to a notice in the OJEU complete a pre-qualification questionnaire. A shortlist is drawn up and in the second stage, shortlisted practices are invited to submit tenders. In some cases this extends to a third stage, which comprises a mini competition.

Competitive dialogue bids - A two-stage bidding process: architectural practices responding to a notice in the OJEU are subject to a pre-qualification stage. A shortlist is drawn up and the shortlisted practices are invited to participate in a competitive dialogue. This allows clients to discuss designs with practices; there may be further shortlisting. When the discussions are completed practices are invited to submit final tenders. Design Contest - Architectural practices submit design proposals to the client who then selects one proposal.

Negotiated bid - The client negotiates directly with one or more architectural practices to achieve the desired outcome.

Pre-qualification or Pre-qualification Questionnaire (PQQ) - Architectural practices will be asked a number of questions to demonstrate their technical ability and past experience. Questions may also cover financial standing, PII cover, and compliance with policies covering the environment, health and safety and equal opportunities. Size of architectural practice - Size groups are based on the number of architectural staff. These include architects, technologists, assistants.



2.RespondentProfile

Forty one per cent of architectural practices are 1 or 2 person firms. Just 5 per cent of responding practices have over 30 staff. The profile is in line with that achieved in other surveys of the profession.

Table 2: Response profile by size of architectural practice

size (number of architectural staff) per cent response

1 24

2 15

3 to 5 28

6 to 10 17

11 to 30 11

31 to 50 3

51 to 100 2

101 to 200 0

201+ 0

TOTALRESPONSE 100

Half of respondents are based in London and the South East, in line with proportion of architects recorded in other surveys. Small responses are recorded from Scotland Wales and Northern Ireland so data from these regions must be regarded with caution. The response from Scotland is particularly low.

Table 3: Response profile by Region

region per cent response

North 13

Midlands / East Anglia 15

South East 20

London 31

South West 15

Scotland 2

Wales 3

Northern Ireland 2

TOTAL RESPONSE 100

Regional analysis is based on four regions which have been grouped together as follows - these groupings are due to small sample sizes in some regions:

London South of England = South East and South West



Central & Northern England = Midlands / East Anglia and North Rest of UK = Wales, Scotland, Northern Ireland



3.Howmuchpublicsectorworkisundertakenbyarchitecturalpractices

Public sector work accounts for approximately 20 per cent of responding architectural practices’ turnover, a larger proportion amongst large and medium practices compared with small firms. OJEU-related work accounts for only a tiny proportion of work in small practices (up to 5 staff) but up to 17 per cent of turnover in firms with over 10 staff. Public sector work which is not OJEU-related accounts for most public sector work for small practices and a decreasing share for medium and larger practices.

Table 4: Average practice turnover - totals and public sector work, analysed by size of architectural practice

average practice turnover - from all work

average turnover from OJEU-related

work

average turnover from public work not related

to OJEU

size of practice (number of arch. staff) median, £s mean, £s median,

£s mean, £s median,

£s mean, £s

1 40,000 44,405 0 1,027 0 4,273

2 80,000 95,506 0 855 0 9,152

3 to 5 210,445 242,878 0 1,204 0 30,611

6 to 10 460,000 497,798 0 44,786 20,000 79,314

11 to 30 1,060,338 1,090,800 0 183,999 50,000 111,472

31 or more 3,000,000 3,289,363 300,000 538,333 20,000 108,833

ALL 161,000 416,032 0 46,103 0 37,972

Table 5: Proportion of turnover from public sector work, analysed by size of architectural practice

per cent of turnover from:


OJEU-related work public work not related to OJEU

other (private) work

1 2 10 88

2 1 10 90

3 to 5 0 13 87

6 to 10 9 16 75

11 to 30 17 10 73

31 or more 16 3 80

ALL 11 9 80



Figure 1: Analysis of architectural practice turnover analysed by practice size

Table 6: Proportion of turnover from public sector work, analysed by region

per cent of turnover from:


OJEU-related work public work not related to OJEU

other (private) work

London 11 9 80

Southern England 10 7 83

Central Northern England 13 12 75

Rest of UK 13 14 73

ALL 11 9 80

These figures are grossed-up to reflect our estimate of the level of public sector turnover in all architectural practices in the UK. Please note, we have made a number of assumptions in our grossing up calculations so the figures presented below should be considered to be very much of an initial estimate (see Appendix II for details of methodology used for grossing-up).

The data suggests out of a total estimated turnover figure for architectural practices in 2011 of £1,557 million, public sector work accounted for an estimated £288 million (19 per cent). This appears to be split almost evenly between OJEU-related work and work which is not OJEU-related.



Table 7: Grossed-up figures showing ESTIMATED turnover of all UK architectural practices, 2011

total ESTIMATED turnover, £millions

TOTAL public OJEU-related work

public work not related to OJEU

1 139 3 13

2 85 1 8

3 to 5 206 1 26

6 to 10 305 27 49

11 to 30 480 81 49

31 or more 342 25 5

ALL 1,557 138 150



4.HowoftenarchitectsreviewOJEU

A substantial proportion (46 per cent) of responding architectural practices say they ‘never’ review the OJEU. At the other end of the scale, 20 per cent review the OJEU at least once a week. Clearly, the frequency with which practices review the OJEU rises in line with practice size.

Figure 2: How often respondents review the OJEU

Table 8: How often respondents review the OJEU, analysed by practice size

size of practice (number of architectural staff) (%)

how often review OJEU 1 2 3 to 5 6 to 10

11 to 30

31 or more

ALL

more often than once a week 1 6 5 9 14 39 8

about once a week 3 6 8 18 26 50 12

about once every two weeks 1 2 4 7 6 0 4

about once a month 4 6 10 11 17 6 9

about once every three months 3 0 12 7 6 6 6

about once every six months 4 6 5 14 9 0 7

once a year 3 9 7 0 0 0 4

less frequently than once a year 5 4 8 2 3 0 5

never 76 60 41 32 20 0 46

TOTAL 100 100 100 100 100 100 100



Table 9: How often respondents review the OJEU, analysed by region

region (%)

how often review OJEU London Southern England

Central Northern England

Rest of UK

ALL

at least once every two weeks 32 14 23 46 24

between once a month and once every three months

13 16 17 10 15

once every six months or less 12 12 22 19 16

never 42 60 37 27 46

TOTAL 100 100 100 100 100

Figure 3: How often respondents review the OJEU analysed by practice size



5.SubmittingOJEUbids

Table 10 below shows how many architectural practices submitted different numbers of bids. A majority of architectural practices with up to 5 staff did not submit any bids in 2011, but this reduces to about one third of practices with between 6 and 30 staff.

Figure 4: Proportion of architectural practices submitting OJEU bids in 2011, analysed by size of practice

Table 10: How many OJEU bids architectural practices submitted in 2011, analysed by size of practice

size of practice (number of architectural staff) (%) total number of bids submitted in 2011 1 2 3 to 5 6 to 10 11 to 30 31 or

more

ALL

0 89 76 56 34 30 12 58

1 to 3 7 13 26 25 12 12 17

4 to 7 3 9 6 20 15 6 9

8 to 12 1 2 9 9 12 18 7

13 to 20 0 0 1 7 12 12 4

21 to 50 0 0 1 4 12 35 4

over 50 0 0 0 2 6 6 1

TOTAL 100 100 100 100 100 100 100

Base: ALL practices including those who submitted NO bids in 2011



Table 11: How many OJEU bids architectural practices submitted in 2011, analysed by region

region (%) ALL total number of bids submitted in 2011 London Southern

England Central

Northern England

Rest of UK

0 54 71 53 38 58

1 to 3 16 10 23 29 17

4 to 7 7 11 8 5 9

8 to 12 9 2 10 5 7

13 to 20 1 4 3 14 4

21 to 50 9 0 2 10 4

over 50 3 1 0 0 1

TOTAL 100 100 100 100 100


Table 12: Average (mean) number of OJEU bids submitted per architectural practice during 2011 BASE = ALL practices

average number bids per practice submitted in 2011

successful* not successful

not yet known

ALL submitted

open bids 0.1 0.4 0.1 0.6

restricted - PQQ / interest stage 0.3 0.9 0.2 1.4

restricted - awards stage 0.1 0.2 0.0 0.3

mini competition 0.1 0.3 0 0.4 competitive - pre qualification 0.1 0.4 0.1 0.6

competitive - dialogue 0.0 0.1 0.0 0.1

design contest n/a** n/a** n/a** 0.2

negotiated 0.1 0.0 0.0 0.2

TOTAL 0.9 2.5 0.4 3.9

Base: ALL practices including those who submitted NO bids in 2011 Figures are rounded therefore rows and columns will not necessarily sum perfectly * “Successful” = success measured for all bids submitted including first stage bids of a 2-stage process. This is NOT the same as success at winning fee-earning work ** not available due to incomplete data

The chart below shows the total number of bids reported on the survey questionnaire by the 333 respondents. This demonstrates both the absolute level of involvement in different OJEU bids, and the relative success rates.

By far the largest number of bids submitted by responding architectural practices is for Restricted - PQQ stage bids.



Figure 5: Number of bids submitted by survey respondents, including outcome

Base = all bids submitted by respondents. Figures shown are number of bids (total = 1177 bids) submitted by responding practices. These figures have NOT been grossed-up to reflect the total profession.

The average number of bids made in 2011 is very low for small architectural practices, with an average of 0.4 bids made during the year. Architectural practices with between 6 and 10 staff submitted, on average, six OJEU bids in 2011. Larger practices (11 to 30 staff) averaged about one a month with higher averages for the very largest firms.

Table 13: Average number of OJEU bids submitted in 2011 - all architectural practices (including those who submitted no OJEU bids)

size of practice (number of architectural staff) average number of bids submitted in 2011

1 2 3 to 5 6 to 10 11 to 30

31 or more

ALL

open bids 0.1 0.1 0.4 0.9 1.8 1.9 0.6


0.2 0.2 0.9 2.4 3.8 7.4 1.4

restricted - awards stage 0.0 0.0 0.1 0.4 1.1 2.4 0.3

mini competition 0.1 0 0.1 0.6 1.5 1.8 0.4

competitive - pre qualification

0.0 0.2 0.3 0.7 2.1 4.3 0.6

competitive - dialogue 0.0 0.0 0.1 0.1 0.2 1.5 0.1

design contest 0.0 0.1 0.1 0.6 0.6 0.4 0.2

negotiated 0.0 0.1 0.1 0.1 0.7 0.8 0.2

TOTAL - all bids submitted 0.4 0.8 2.1 5.9 11.7 20.5 3.9




Using the same techniques to gross-up the survey findings, to reflect the total profession, suggests architects submitted 14,500 bids in 2011. The largest number - which we estimate to be almost 5,500 bids, representing 42 per cent of all bids submitted - was for Restricted PQQ stage. This figure also includes mini competitions (see section 8, page 25).

Table 14: Grossed-up figures showing ESTIMATED number of OJEU bids made by all UK architectural practices, 2011

ESTIMATED total number of bids submitted in 2011 by ALL UK architectural practices

ALL

open bids 2,282

restricted - PQQ / interest stage 5,480

restricted - awards stage 1,064

mini competition 1,613

competitive - pre qualification 2,233

competitive - dialogue 390

design contest 847

negotiated 626

TOTAL - all bids submitted 14,535



6.OutcomeofsubmittingOJEUbids

Out of all bids submitted by responding architectural practices in 2011, 24 per cent were successful. But for another 12 per cent the outcome was not known at the time of submitting the data, so the base we use for the tables below (except Figure 6) is all bids for which the outcome is known. On this base, the success rate for bids submitted in 2011 by all responding practices is 27 per cent.

However, this represents “success” at each stage of the bid; in many cases the OJEU process requires practices to be successful at more than one stage in order to finally “win” the work. Factoring in the required success at both stages brings this overall success rate down to an estimated 15 per cent.

Figure 6: Outcomes of bids submitted by respondents

Base = all bids submitted by respondents in 2011



Table 15: Success rate of bids analysed by type of bid - success rate measured for those bids whose outcome is known

type of bid success rate - where outcome known

open bids 19

restricted - PQQ / interest stage 23

restricted - awards stage 31

restricted - BOTH stages 1 and 2 7

mini competition 27

restricted - ALL THREE STAGES stages 1, 2, 3** 2

competitive - pre qualification 25


competitive - BOTH stages 1 and 2 9

design contest n/a***

negotiated 75

ALL successful bids* including those who were successful at Stage 1 in order to proceed to Stage 2

27

ALL successful at Final Stage - estimated* 15

Base = all bids submitted by respondents in 2011 where outcome is known * estimate combining both stages of a two-stage bid ie “success” = successful at reaching the second stage of a 2-stage process and proceeding to winning fee-earning work ** restricted bids may be either 2 stage or 3 stage *** not available due to incomplete data Figure 7: Success rate of bids where outcome is known now excludes design contests and newly designed



The highest success rates are recorded for negotiated bids, at 75 per cent. Taken together, the rates of being successful in both stages of the two stage bids (restricted and competitive) fall to 7 and 9 per cent respectively, while the three stage restricted bid records a success rate of 2 per cent.

Table 16: Success rates of OJEU bids, out of all those whose outcome is known, analysed by type of bid and size of architectural practice

size of practice (number of architectural staff) success rate (%)**

1 2 3 to 5 6 to 10 11 to 30 31 or more

ALL

one stage bids:

open bids 0* 50* 7 22 24 15 19

design contest n/a n/a n/a n/a n/a n/a n/a***

negotiated n/a n/a 77 33 87 62 75

two / three stage bids:


15* 0* 16 24 28 23 23

restricted - awards stage

n/a n/a 33 20 38 31 31

restricted - both stages

0* 0* 5 5 11 7 7

mini competition 0 0 0 31 30 30 27

restricted - all three stages

n/a n/a n/a 2 3 2 2

competitive - pre qualification

n/a 0* 30 18 30 23 25

competitive - dialogue

n/a n/a 17* 14* 83* 31 35

competitive - both stages

n/a n/a 5 3 25 7 9

ALL**** 14 18 22 23 36 27 27

Base = all bids submitted by respondents in 2011 where outcome is known *= small sample, treat with caution ** success rate is measured only for those bids whose outcome is known *** not available due to incomplete data **** ALL = success measured for all bids submitted including first stage bids of a 2-stage process. This is NOT the same as success at winning fee-earning work n/a means no bids were submitted therefore success rate cannot be calculated (except *** above). 0 means that at least one bid was submitted but no bids were successful.

Responding architectural practices say there are many other bidders for Open bids and Restricted PQQ bids. At least 16 per cent of Competitive Pre Qualification and Design Contest bids attracted more than 100 other bidders. The smallest number of other bidders is recorded for Competitive Dialogue and Negotiated bids. There is considerable variation in the data provided, table 18 adds detail to the averages in Table 17.



Table 17: Number of other bidders, analysed by type of bid

type of bid average (median) number of other bidders

open bids 17

restricted - PQQ / interest stage 18

restricted - awards stage 5

mini competition 5

competitive - pre qualification 6


design contest 6

negotiated 2

Base: five most recent OJEU bids submitted by survey respondents

Table 18: Range in number of other bidders, analysed by type of bid

number of other bidders type of bid

1 to 3 4 to 9 10 to 99 100 or more

ALL

open bids 14 31 43 11 100

restricted - PQQ / interest stage 9 32 49 9 100

restricted - awards stage 11 80 9 0 100

mini competition 36 45 18 0 100

competitive - pre qualification 26 32 26 16 100

competitive - dialogue 48 39 13 0 100

design contest 33 33 14 19 100

negotiated 82 9 9 0 100

ALL bids submitted 23 39 29 9 100

Base: five most recent OJEU bids submitted by survey respondents



7.CostsofpreparingOJEUbids

Responding architectural practices stated how much they spent in 2011 preparing OJEU bids. On average, each practice which had prepared any OJEU bids in 2011, spent just over £33,000 (mean average figure) preparing all its OJEU bids in 2011. This varies by practice size, between an average of £2,200 for a one person practices, to an average of over £100,000 for large practices (over 30 staff).

Table 19: Average costs to architectural practices of preparing ALL bids submitted in 2011


mean cost of preparing bids, £s

1 2,242

2 2,422

3 to 5 11,570

6 to 10 15,058

11 to 30 65,707

31 or more 109,146

ALL 33,410

Base: all respondents who submitted OJEU bids in 2011 Mean average used in preference to Median average because median does not adequately take account of the small number of large responding practices

When the figures above are grossed up, to reflect all architectural practices in the UK, the total estimated cost of preparing OJEU bids is £40 million. This estimate has been prepared by grossing-up these average (mean) costs per practice and multiplying by the number of practices in the UK. The grossing-up has only been applied to the proportion of practices in each size group who have submitted bids. (see explanation in Appendix II). The data suggests that total practice spend on bidding for OJEU-related work accounts for 29 per cent of the fee earnings they derive from this work.

Table 20: Estimated total cost to the profession of submitting all OJEU bids in 2011


estimated total spend, £s

estimated fee earnings from public OJEU-related work

bid spend as per cent OJEU

fee earnings

bid spend as per cent all

public sector fee earnings

1 553,751 3,213,483 17* 3 2 479,062 760,950 63* 5 3 to 5 3,946,951 1,020,992 n/a* 15* 6 to 10 5,933,953 27,453,818 22* 8 11 to 30 19,273,956 80,959,560 24* 15* 31 or more 10,015,765 24,763,318 40* 34* ALL PRACTICES 40,203,436 138,172,121 29 14 * small sample size, consider with caution



To assess the costs more fully, architectural practices were asked to provide details of the five most recent bids they had submitted. These would not necessarily have been submitted in 2011, some may date from before. A total of 146 respondents provided information (out of total response of 333), and the total number of bids for which information was provided is 554.

Note: the BASE FOR TABLES 21 TO 25 BELOW is the five most recent bids, this base differs from the analyses in the rest of this report. We do not know how these five bids were selected - they should be the most recent five, but in practices where a large number of bids was submitted this may comprise, for example, five recent bids from one client, a random selection, the five most recent successful bids - so no assumptions can be made that the profile of bids for which information was provided necessarily reflects the profile of all bids submitted by architectural practices. For a profile of the types of jobs included here please see Appendix III.

The average (median) costs incurred by architectural practices in preparing a bid are highest for design contests. Next highest is the second stage of competitive (dialogue stage) bids. The lowest average cost is for negotiated bids - which also have the highest success rate. The average cost for preparing a restricted PQQ bid - the most common bid submitted by architectural practices - is £2,500. We did attempt to correlate bid costs with project contract value, however, no clear correlation emerged. This is endorsed by research undertaken by PWC “Public Procurement in Europe”, 2011, who report “there is practically no relationship between contract value and procurement cost”. This suggests it is reasonable to look at the average bid preparation costs in isolation, and not necessary to relate to the total potential project fee.

Table 21: Average (median) costs of submitting an OJEU bid

median cost, £s

base - no. of jobs

open bids 2,500 112


2,500 192

restricted - awards stage 3,000 51

mini competition 3,750 32

competitive - pre qualification 3,000 55

competitive - dialogue 4,500 19

design contest 5,000 33

negotiated 1,000 15

Base: five most recent OJEU bids submitted by respondents MEDIAN average used in preference to the Mean to avoid influence from extreme high and low values



Figure 8: Average (median) costs of submitting an OJEU bid

Table 22: Average (median) costs of submitting an OJEU bid analysed by type of bid and by client

median costs, £s Local Authority

Housing Provider

Education Authority

Health Authority

Cultural Provider

ALL

open bids 2,500 5,000 2,000 n/a 1,500* 2,500


2,000 4,000 1,800 3,000 4,250 2,500

restricted - awards stage 2,500 5,500* 1,500* n/a n/a 3,000

mini competition 2,000 4,000 n/a n/a n/a 3,750

competitive - pre qualification 3,000 4,750 2,600 975* n/a 3,000

competitive - dialogue 5,000* n/a 18,600 n/a n/a 4,500*

design contest 6,000* 3,750 n/a n/a 5,000 5,000

negotiated 1,000 n/a n/a n/a n/a 1,000

Base: five most recent OJEU bids submitted by respondents n/a = not available in cases where 5 or fewer bids of that type were reported *= small sample, treat with caution



Table 23: Average (median) costs of submitting an OJEU bid analysed by size of architectural practice and type of bid

size of practice (number of architectural staff) median costs, £s

1 2 3 to 5 6 to 10 11 to 30 31+

open bids 1,000 n/a 1,500 2,750 2,200 6,000


3,000* 3,000* 1,500 3,000 3,000 3,250

restricted - awards stage n/a n/a 750 3,450 10,000 10,000

mini competition n/a n/a 4,000 3,500 3,250 n/a

competitive - pre qualification n/a n/a 3,500 3,000 n/a 5,500*

competitive - dialogue n/a n/a 1,500 n/a n/a 50,000*

design contest n/a n/a 4,600 7,000 n/a n/a

negotiated n/a n/a 500 n/a n/a n/a

Base: five most recent OJEU bids submitted by respondents n/a = not available in cases where 5 or fewer bids of that type were reported *= small sample, treat with caution

Table 24: Average (median) costs of submitting an OJEU bid analysed by whether the bid was an Individual or Framework bid

type of bid median costs, £s

Individual 2,450

Framework 3,000

Framework - mini competition 3,750

Base: five most recent OJEU bids submitted by respondents

Table 25: Average (median) costs of submitting an OJEU bid analysed by whether the bid was successful median costs, £s successful not successful ALL

open bids 2,000 2,400 2,500*


3,000 2,000 2,500

restricted - awards stage 1,000 3,000 3,000

mini competition 3500 3750 3750

competitive - pre qualification 3,200 3,000 3,000

competitive - dialogue 3,250 n/a 4,500

design contest n/a 5,000 5,000

negotiated 1,000 n/a 1,000

Base: five most recent OJEU bids submitted by respondents * some ‘all’ figures may not match precisely as not all respondents completed every detail about the bids



Comparing these costs of preparing bids with the success rates provides an estimate of the theoretically likely cost to a practice of winning work. The table below shows these costs. The analysis suggests the cost to practices of securing one winning bid ranges (with the exception of negotiated bids) between £10,000 and £16,000 in a one-stage bid, but rises substantially to over £45,000 for two-stage bids.

Table 26: Theoretical cost to architectural practices of winning one bid - average per practice

average (median) cost of bid, £s

success rate, % theoretical cost to practice of winning

one bid, £s* open bids 2,500 19 13,158

restricted - PQQ / interest stage 2,500 23 10,870

restricted - awards stage 3,000 31 9,677

restricted - BOTH first and second stages

5,500 7 45,571

mini competition 3,750 27 11,719

restricted - ALL THREE stages - first, second and third

9,250 2 179,325

competitive - pre qualification 3,000 25 12,000

competitive - dialogue 4,500 35 12,857

competitive -BOTH first and second stages

7,500 9 45,833

design contest 5,000 31 16,129

negotiated 1,000 75 1,333

Base: cost = five most recent OJEU bids submitted by respondents; success rate = all bids submitted by respondents in 2011 where outcome is known * this is the average cost of bid (column 2) multiplied by the probability of winning the bid (column 3)



8.FrameworkAgreements

Sixteen per cent of architectural practices were engaged, in 2011, in one or more ongoing Framework Agreements. This rises by practice size.

Table 27: Involvement by architectural practices in ongoing Framework Agreements in 2011


per cent practices involved

average (mean) number of Framework Agreements per

practice 1 2.6 0.0

2 6.0 0.1

3 to 5 17.3 0.3

6 to 10 33.9 0.7

11 to 30 60.0 2.5

31 or more 77.8 3.3

ALL 16.0 0.6


Thirteen per cent of architectural practices participated in mini competitions, arising from Frameworks, in 2011 (the third stage of a restricted bid). Again the incidence of participation increases with practice size.

Table 28: Involvement by architectural practices and success in mini competitions, 2011


per cent practices involved

average (mean) number

competitions participated in

average (mean) number

competitions successful

success rate (per cent)

1 1.4 0.1 0.0 0

2 4.0 0.0 0.0 0

3 to 5 5.4 0.1 0.0 0

6 to 10 23.2 0.6 0.2 31

11 to 30 37.1 1.5 0.5 30

31 or more 44.4 1.8 0.6 30

ALL 12.5 0.4 0.1 27


Average fee received for successful mini competitions arising from Frameworks is £19,510. This is the average per mini competition, not per practice.



Table 29: Average fee received by architectural practices from successful Framework mini competitions in 2011


average (mean) fee per mini competition, £s

1 n/a

2 n/a

3 to 5 n/a

6 to 10 17,893

11 to 30 50,232

31 or more 217,778

ALL 19,510



9.Architects’perceptionsofwhatisimportantinwinningabid

Financial criteria emerge as being perceived by architects to be the most important factor in winning a bid. Next come the size of an architectural practice and response to brief. Design quality and technical skills receive the lowest number of first and second ranks, with design quality being ranked lowest (fifth) by the largest proportion of respondents.

Figure 9: Respondents’ perceptions of the importance of various criteria in winning a bid, ranked by respondents where 1 = most important and 5 = least important.

Table 30: Respondents’ perceptions of the importance of criteria in winning a bid

criteria % rank where 1=most important and 5 = least important

1 2 3 4 5

design quality 18 11 14 16 40

size of practice 33 17 13 13 23

technical skills 13 17 31 25 14

response to brief 18 23 26 22 12

financial criteria 33 26 14 16 11

Table 31: Respondents’ perceptions of the importance of various criteria in winning a bid analysed by size of practice - for those who rank criteria as 1 or 2 (out of 5)

per cent practices ranking 1 or 2:


design quality size of practice

technical skills

response to brief

financial criteria

1 36 41 22 41 57

2 26 50 40 34 50

3 to 5 30 61 19 41 57

6 to 10 24 53 31 45 65



11 to 30 30 48 37 41 48

31 or more 25 19 63 38 88

ALL 29 50 30 41 59

AppendixI‐SurveyQuestionnaire





AppendixII‐MethodologicalNotes

1. Grossing-up method

Step 1 - estimate number of architectural practices

We used as a base the calculations we have performed previously for the Architects’ Council of Europe Sector Study report, published by the ACE in December 2010. In this we estimated the number of architectural practices in the UK as 6024. We examined other research including the RIBA/The Fees Bureau Architects’ Employment and Earnings Survey, the Mirza & Nacey Architects’ Workload Survey and the Fees Bureau report Architects Performance. Each provides indicators of staffing movements and implied changes to the number of practices. However, we decided after careful thought to stay with the ACE estimate of a total of 6024 architectural practices. In the ACE report there is also an analysis of architectural practice numbers by broad size group (table A2.1), from which we have estimated further into the narrower size groups used here (Table A2.2):

Table A2.1: Estimated number of UK architectural practices by size - source: ACE Sector Study 2010 estimates


number of practices

1 3094

2 to 5 1815

6 to 30 1022

31+ 93

ALL PRACTICES 6024

Table A2.2: Estimated number of UK architectural practices by size -Mirza & Nacey estimates updated to 2011


number of practices

1 3129

2 890

3-5 848

6-10 613

11-30 440

31-50 46

51+ 58

ALL PRACTICES 6024



Step 2

The next step is to use mean turnover per practice data from this survey by practice size and gross up by the number of architectural practices to estimate total turnover for the profession. This is shown in Table A2.3 below.

Table A2.3: Estimated annual turnover of UK architectural practices by size

average (mean) turnover - from Survey,

£s

number of practices - from table A2.2

TOTAL grossed-up turnover: column 2 times

column 3, £s 1 44,405 3129 138,943,245

2 95,506 890 85,000,340

3 to 5 242,878 848 205,960,544

6 to 10 497,798 613 305,150,174

11 to 30 1,090,800 440 479,952,000

31 or more 3,289,363 104 342,093,752

ALL 416,032 6024 1,557,100,055

We have tried to keep our methodology for grossing-up as simple as possible, and have limited the number of assumptions made. We suspect the response from the 31 or more size group may be less solid than other groups (indeed, the variance is substantially higher) but this is a function of the small number of architectural practices present in this group. These practices account a disproportionate volume of the profession’s turnover and therefore any under-reporting (or indeed over-reporting) from this group amongst survey respondents may affect the grossed-up figures quite substantially. But this is a question which may result in lengthy argument, we have instead tried to keep our method simple and limit the number of assumptions made.

A similar simple multiplication method is used to gross-up the total number of bids submitted (Table A2.4).

Table A2.4: Estimated turnover of UK architectural practices by size with further split of turnover into public sector work (OJEU-related and non-related)

total ESTIMATED £ turnover

TOTAL public OJEU-related work

public work not related to OJEU

1 138,943,245 3,213,483 13,370,217

2 85,000,340 760,950 8,145,280

3 to 5 205,960,544 1,020,992 25,958,128

6 to 10 305,150,174 27,453,818 48,619,482

11 to 30 479,952,000 80,959,560 49,047,680

31 or more 342,093,752 24,763,318 5,006,318

ALL 1,557,100,055 138,172,121 150,147,105

Similarly, the costs incurred in submitting bids are grossed-up, but these figures are only grossed-up by the number of practices who are active in submitting bids. So in



the table below, grossed-up total spend is calculated by multiplying the mean value per practice (column 1) by the number of practices who are active in submitting bids (i.e. column 3 multiplied by column 2):

Table A2.5: Showing how total costs have been grossed-up


mean costs £s per practice

percent who have submitted

a bid in 2011

number practices

estimated total spend, £s

1 2,242 8 3129 553,751

2 2,422 22 890 479,062

3 to 5 11,570 40 848 3,946,951

6 to 10 15,058 64 613 5,933,953

11 to 30 65,707 67 440 19,273,956

31 or more 109,146 88 104 10,015,765

ALL PRACTICES 40,203,436



AppendixIII‐Profileofdatasubset:fivemostrecentbids

The profile of the five most recent bids provided by survey respondents is as follows.

Table A3.1: Bid data analysed by type of bid and by size of architectural practice

size of practice (number of architectural staff) type of bid (% of all bid data provided) 1 2 3 to 5 6 to 10 11 to 30 31 or

more

ALL

Open bids 33 19 14 21 29 28 22

Restricted bids - PQQ stage/Expressions of Interest

28 29 46 49 37 35 42

Restricted bids - awards stage

6 13 9 6 15 15 10

Competitive - pre qualification

6 13 14 15 13 8 13

Competitive - dialogue 6 0 7 2 0 9 4

Design Contest 6 19 6 5 4 5 6

Negotiated 17 6 3 2 1 0 3

TOTAL 100 100 100 100 100 100 100

Table A3.2: Bid data analysed by individual or/ framework bid and by size of architectural practice

size of practice (number of architectural staff) type of bid (% of all bid data provided) 1 2 3 to 5 6 to 10 11 to 30 31 or

more

ALL

Individual 63 67 61 52 38 53 54

Framework 31 30 35 43 54 41 41

Framework - mini comp 6 3 4 5 8 7 6

TOTAL 100 100 100 100 100 100 100

Table A3.3: Bid data analysed by client type and by size of architectural practice

size of practice (number of architectural staff) type of client (% of all bid data provided)

1 2 3 to 5 6 to 10 11 to 30 31 or more

ALL

Local Authority 33 40 33 39 26 23 32

Regional Authority 0 0 9 1 3 1 4

Development Agency 0 3 2 2 6 0 2

Health Authority 3 0 4 5 15 5 6

Education Authority 8 10 16 11 13 24 14

Housing Provider 39 23 13 17 20 19 18

Central Government 0 3 2 1 1 3 2

Cultural Provider 6 13 9 7 3 4 7

Other organisation 11 7 13 18 12 20 15



TOTAL 100 100 100 100 100 100 100

RIBA Procurement Survey 2012 - Emap.com · The RIBA commissioned Mirza & Nacey Research to conduct an on-line survey amongst architectural practices during the period January to February

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